By Margot Habiby
Business ExchangeBuzz up!DiggPrint Email .Oil fluctuated near the highest level in 30 months in New York as Libyan rebels fought loyalists at the oil port of Brega and the New York Times reported at least two of Muammar Qaddafi’s sons were seeking his ouster.
Oil rose as much as 0.8 percent before retreating as fighting centered around Brega, a Mediterranean seaport. Qaddafi’s sons are proposing pushing their father aside to transition to a constitutional democracy under the direction of his son Saif al-Islam Qaddafi, the Times reported, citing a diplomat and a Libyan official briefed on the plan.
“The Libyan situation is continuing unabated,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. Prices are tempered by “the talk that Qaddafi’s son and others are trying to arrange exit strategies there. If that situation calms down, then we’ll see several dollars come off the price.”
Crude for May delivery rose 31 cents, or 0.3 percent, to $108.25 a barrel at 11:32 a.m. on the New York Mercantile Exchange. Earlier, it touched $108.78, the highest level since Sept. 24, 2008. Prices are up 28 percent from a year ago.
Brent oil for May settlement climbed $1.67, or 1.4 percent, to $120.37 a barrel on the London-based ICE Futures Europe exchange. Earlier, it advanced to $120.63 a barrel, the highest intraday price since Aug. 22, 2008.
A person close to Qaddafi’s sons Saif and Saadi said the father appeared to be willing to go along with his sons’ transition plan, the Times reported. Ali al-Essawi, a rebel representative, said in Rome today that it was unacceptable to replace Qaddafi with one of his sons.
Libya has Africa’s largest crude-oil reserves and was the continent’s third-largest producer before the conflict began.
Economic Growth
Earlier, crude rose amid speculation that U.S. economic growth may support demand and a protracted conflict in Libya will curtail supply. Italy rejected a reported cease-fire proposal by Qaddafi and said it would recognize the opposition as the legitimate government, following a similar move by France.
“It’s becoming increasingly clear that the situation in Libya may be prolonged,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “The more one looks at uprisings in the Middle East, the more one realizes they will not be easy to resolve. At the same time, oil demand is relatively inelastic to higher prices.”
The U.S. jobless rate dropped to 8.8 percent last month from 8.9 percent the prior month, the fourth straight decrease, the Labor Department reported last week.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
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